HP to Cut Another 15,000 Jobs as Turnaround Continues

By Jeffrey Burt  |  Posted 2014-05-22 Print this article Print
HP layoffs

HP's business groups saw a mix of revenue gains and declines. While revenues fell in the printing (4 percent), enterprise services (7 percent) and the enterprise business (2 percent), they grew in PCs (7 percent) and stayed flat in software. Both desktop and notebook PCs saw revenue increases of about 6 percent.

Whitman echoed comments by the heads of other vendors, such as Intel and Advanced Micro Devices, saying that the global PC market appears to be stabilizing after a couple of years of sales declines. She agreed that Microsoft ending support for the aged Windows XP operating system helped drive sales of new PCs.

"We actually think that migration is going to extend for some period of time, maybe another 12 months to 18 months," Whitman said. "But we also see some momentum in what I would call a long overdue PC refresh and, frankly, the fact that companies are realizing there is a need for a productivity tool that’s different than just a tablet."

Jack Narcotta, an analyst with Technology Business Research, said in a research note that the quarterly numbers—particularly for the PC and server businesses—were encouraging and indicated that the turnaround under Whitman was working.

"HP continues to emphasize solutions over individual products, as solutions offer more opportunities for HP to deepen its engagement with consumers, commercial entities and channel partners," Narcotta wrote. "Additionally, amplifying the value of a proven end-to-end services platform is a compelling differentiator against Lenovo’s limited set of PC and professional service capabilities and Dell’s challenging evolution as a private company."

However, the company still is trying to find a "compelling message that fosters deeper enterprise customer engagement segments beyond x86 servers and storage," which means HP will continue to see year-to-year revenue declines of 3 percent to 5 percent through 2015 "as customers scale back purchases and gauge HP’s transformation progress."


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